Economic and social aspects of marketing

Sometimes criticized for its impact on personal economic and social well-being, marketing has been said to affect not only individual consumers but also society as a whole. This section briefly examines some of the criticisms raised and how governments, individuals, and marketers have addressed them.

 

Marketing and individual welfare

Criticisms have been leveled against marketers, claiming that some of their practices may damage individual welfare. While this may be true in certain circumstances, it is important to recognize that, if a business damages individual welfare, it cannot hope to continue in the marketplace for long. As a consequence, most unfavourable views of marketing are criticisms of poor marketing, not of strategically sound marketing practices.
Others have raised concerns about marketing by saying that it increases prices by encouraging excessive markups. Marketers recognize that consumers may be willing to pay more for a product—such as a necklace from Tiffany and Co.—simply because of the associated prestige. This not only results in greater costs for promotion and distribution, but it allows marketers to earn profit margins that may be significantly higher than industry norms. Marketers counter these concerns by pointing out that products provide not only functional benefits but symbolic ones as well. By creating a symbol of prestige and luxury, Tiffany's offers a symbolic benefit that, according to some consumers, justifies the price. In addition, brands may symbolize not only prestige but also quality and functionality, which gives consumers greater confidence when they purchase a branded product. Finally, advertising and promotions are often very cost-effective methods of informing the general public about items and services that are available in the marketplace.
A few marketers have been accused of using deceptive practices, such as misleading promotional activities or high-pressure selling. These deceptive practices have given rise to legislative and administrative remedies, including guidelines offered by the Federal Trade Commission (FTC) regarding advertising practices, automatic 30-day guarantee policies by some manufacturers, and “cooling off” periods during which a consumer may cancel any contract signed. In addition, professional marketing associations, such as the Direct Marketing Association, have promulgated a set of professional standards for their industry.

 

Marketing and societal welfare

Concern also has been raised that some marketing practices may encourage excessive interest in material possessions, create “false wants,” or promote the purchase of nonessential goods. For example, in the United States, children's Saturday morning television programming came under fire for promoting materialistic values. The Federal Communications Commission (FCC) responded in the early 1990s by regulating the amount of commercial time per hour. In many of these cases, however, the criticisms overstate the power of marketing communications to influence individuals and portray members of the public as individuals unable to distinguish between a good decision and a bad one. In addition, such charges cast marketing as a cause of social problems when often the problems have much deeper societal roots.
Marketing activity also has been sometimes criticized because of its control by strong private interests and its neglect of social and public concern. While companies in the cigarette, oil, and alcohol industries may have significant influence on legislation, media, and individual behaviour, organizations that focus on environmental, health, or education concerns are not able to wield such influence and often fail to receive appropriate recognition for their efforts. While there is clearly an imbalance of power between private interests and public ones, in the late 20th century, private companies have received more praise for their marketing efforts for social causes.